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I was attempting to show that the total construction cost of the CHSRP will be considerably more than the costs projected by its proponents, and raising a point as to whether the cost of expanding the airways and highways would be more costly.  I was not presenting a total cost model.   Clearly, there are other variables (quantative and qualitative) to consider in any comparison.  Operating costs, maintenance costs, salvage values, environmental impacts, etc. would be factored into a complete analysis.  This was not my objective nor, for that matter, could it be since I don't have access to the necessary data. The estimated cost of NextGen, according to the FAA, is $22 billion.  I presume this does not include the financing costs.  The government will fund the project with U.S. Treasury issues.  Using the current weighted average interest rate for the U.S. Treasury (2.56%), the estimated cost of the project at this point, using the 10 year Note as the benchmark security, would be approximately $31.5 billion, which is considerably less than the project cost of the CHSRP. I don't believe that the CHSRP proponents plan to sell the project, especially given the fact that no one would buy it, as suggested by the fact that to date no private investors, other than the manufacturers of the rolling stock or infrastructure, have thrown their hat into the financing ring.  They could hardly be described as arms length investors.  For rate making purposes the total costs of a power plant, including the financing costs, are recovered over the expected life of the plant.  Under the regulated environment in Texas, whilst the plant was under construction, the sponsoring utility could begin to recover the financing costs through a process call Allowance for Funds Used During Construction.  But for costs analysis as well as rate making purposes, the total cost of the financing or debt service is being recovered over the estimated life of the plant.     I never met an investment banker, comptroller, cost accountant, etc. who did not consider the cost of the financing when determining the total cost of a capital project.  After all a viable business has to recover the cost of the financing as well as the other costs of a capital project if it wants to stay in business.  Of course, the government is a different animal, so maybe government accountants have a different system.  It would not surprise me.
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